LEGAL TIPS Tip The Scales ...

By Beth Mulcahy, Esquire - Mulcahy Law Firm, P.C.

Community associations frequently ask for a brief summary of Arizona community association law. The Community Association Cheat Sheet was designed to provide board members, association members, property managers and management companies with pertinent legal information in a short, readable and easy to understand format. I suggest placing the Community Association Cheat Sheet with your Association materials or binder and bringing it to every Association meeting to answer any questions which may arise.

Special Meetings:

· Special meetings of an association may be called by the president, by a majority of the board or by unit owners having 25%, or any lower percentage specified in the bylaws, of the votes in the association.

· Unless the bylaws or articles of incorporation state otherwise, notice of a special or annual meeting must state the date, time, place and purpose of the meeting and must be mailed to the members of the association not fewer than 10 days nor more than 50 days in advance of any meeting of owners.

MEETINGS

The Arizona Open Meeting Law: Pursuant to Arizona law, all meetings of an association and board of directors are required to be open to all association members. Members are allowed to attend the meetings and to listen to the deliberations and proceedings. Members may not, however, participate in any deliberation or discussion unless expressly authorized by a vote of the majority of a quorum of the board. The board may close a portion of a meeting to the members and go into executive session to discuss any of the following subjects:

1. employment or personnel matters for employees of the board or the association;

2. legal advice from an attorney for the board of the association;

3. pending or contemplated litigation and/or

4. pending or contemplated matters relating to the enforcement of the association's governing documents or rules.

Important Meeting Notes:

· An annual meeting of the association members must be held at least once each year.

· Notice to lot/unit owners of regular monthly meetings of the board of directors shall be given at least 48 hours in advance of the meeting by newsletter, conspicuous posting or any other reasonable means as determined by the board. The notice must state the time and place of the meeting.

· Emergency board meetings do not require 48 hours notice if emergency circumstances require action by the board before notice can be given.

RESALE OF LOTS/UNITS: ASSOCIATION MUST PREPARE DISCLOSURE STATEMENTS

Under Arizona law, associations which have over fifty lots/ units are required to mail or deliver to a purchaser within 10 days after receipt of a written notice from a title company of a pending sale all of the following information: a copy of the association's CC&Rs, bylaws, rules and regulations, current operating budget, most recent annual financial report (or a summary of the report if it is over 10 pages) and the most recent reserve study (if any).

The association must also provide the purchaser a dated statement containing:

 1. The telephone number and address of a principal contact of the association;

2. The amount of the assessment for each lot/unit and the amount of any unpaid regular assessments, special assessments or any other assessments, fees or charges currently due and payable from the selling lot/unit owner;

3. A statement by insurance maintained by the association;

4. The total amount of money held by the association as reserves;

5. A statement as to whether the records of the association reflect any alterations or improvements to the lot/unit that violate the CC&Rs;

6. A statement of the case names and case numbers for pending litigation with respect to the lot/unit filed by the association against the lot/unit or filed by the lot/unit owner against the association.

The association may charge the lot/unit owner a reasonable fee to compensate the association for the costs incurred in the preparation of the disclosure statements.